Israel’s Butter Shortage May Worsen Before Rosh Hashana

The ongoing butter shortage in Israel is expected to worsen before Rosh Hashanah.

The was a tender for importers to import butter without having to pay value added tax in order to permit the sale at the supervised price. As Rosh Hashanah approaches, hopes for the shortage to end are vanishing amid a realization the situation is likely to worsen.

The committee dealing with Customs Commission convened on Monday to discuss action against importers who were awarded tariff-free quotas for butter imports, provided they market the butter at the regular subsidized price, but it was not done due to the lack of economic feasibility.

The butter shortage has really been taking place for a year, and it worsened when Tara stopped manufacturing supervised [price] butter in small packages for consumers and diverted butter to institutional marketing (bakeries and cafes for example). In the case of the latter, the price of the butter is not regulated. Tnuva has also cut back butter production.

In the hope of filling the void in butter, the Ministry of the Economy has lifted import ceilings for butter and has removed the 17% VAT from the price in exchange for guarantees the butter is sold at the regulation price only, to avoid price gouging. This applies to importation of 1500 tons in 2019.

2 COMMENTS

Why is there a committee to discuss action against importers who were awarded tariff-free quotas for butter imports, did not do so due to the lack of economic feasibility bacause of the terms imposed by the Government? What is the Committee going to decide, to tell them they are naughty boys or to stop them importing other items? If the Government wants there to be butter it will have to abandon the old fashioned Socialist idea of regulated price control. Butter cannot be said to be an essential commodity. If people want it, they will pay for it, if they don’t they won’t.